Turkey VAT Rate 2027: Standard Rate, Reduced Rates and Exemptions
Turkey VAT Rate 2027: Standard Rate, Reduced Rates and Exemptions
Turkey VAT Rate 2027: Standard Rate, Reduced Rates and Exemptions
Turkey’s standard VAT rate is expected to remain 20% in 2027 unless new legislation is introduced. Reduced VAT rates of 10% and 1% apply to specifically listed goods and services. Exports of goods and qualifying services supplied to foreign customers may be exempt from Turkish VAT. The correct VAT rate depends on the exact product, service, customer location and place where the service is used—not simply on whether the customer is foreign.
Last updated: 16 August 2026 2027 status: Turkey’s final VAT rules for 2027 have not yet been separately announced.
Turkey currently applies three principal VAT rates:
| Transaction category | Current VAT rate |
|---|---|
| Most goods and services | 20% |
| Specifically listed goods and services | 10% |
| Specifically listed essential goods and transactions | 1% |
| Export of goods | VAT exemption |
| Qualifying export of services | VAT exemption |
| Certain other transactions | Full or partial VAT exemption |
Unless a new Presidential Decision or legislative amendment is published, these rates are expected to continue in 2027.
Turkey’s official investment guide confirms that the generally applicable Turkish VAT rates are 1%, 10% and 20%. Investment Office of the Presidency – Turkey Tax Guide
What is the VAT rate in Turkey in 2027?
The expected standard VAT rate in Turkey for 2027 is 20%.
However, Turkey does not apply a single VAT rate to every transaction. Depending on the relevant VAT lists and special legislation, a transaction may be subject to:
20% VAT
10% VAT
1% VAT
Full VAT exemption
Partial VAT exemption
VAT withholding
Reverse-charge VAT
Special VAT rules
The exact VAT rate must therefore be determined separately for each product or service.
Has Turkey officially announced the 2027 VAT rates?
No separate set of VAT rates has yet been announced exclusively for 2027.
As of August 2026, the current principal VAT rates are:
Standard rate: 20%
Reduced rate: 10%
Reduced rate: 1%
These rates are expected to remain in force in 2027 unless the government publishes a new decision.
The final position should be reviewed at the end of 2026 and during 2027 because VAT rates in Turkey can be changed by Presidential Decision.
What is the standard VAT rate in Turkey?
Turkey’s standard VAT rate is 20%.
The 20% rate generally applies where a product or service is not:
Included in one of the reduced-rate lists
Covered by a specific exemption
Outside the scope of Turkish VAT
Subject to a special VAT regime
Typical transactions potentially subject to the standard rate include:
Consultancy services
Legal and accounting services
Software and IT services
Advertising services
Marketing services
Management services
Commercial equipment
Electronics
Furniture
Office supplies
Commercial rent
Construction services, unless a specific rule applies
Digital services
Licence and royalty payments
Most professional services
The classification must still be checked individually. Similar products or services can be subject to different rates.
Which goods and services are subject to 10% VAT?
The 10% reduced rate applies only to goods and services specifically included in the relevant VAT legislation.
Depending on the detailed legal classification, examples may include certain:
Accommodation services
Restaurant and catering services
Passenger transportation services
Medical products and services
Pharmaceutical products
Education services
Cultural and entertainment services
Textile products
Agricultural products
Residential property transactions
Repair and maintenance services
Food-related services
The list cannot safely be applied by using a product’s commercial description alone.
The correct rate may depend on:
Customs tariff classification
Product ingredients
Intended use
Packaging
Delivery method
Type of customer
Property characteristics
Whether the transaction is a good or service
Whether food is sold as a product or served as part of a restaurant service
Which goods and services are subject to 1% VAT?
The 1% rate generally applies to specifically listed essential goods and transactions.
Examples may include certain:
Basic food products
Agricultural products
Seeds and animal feed
Newspapers and periodicals, subject to specific rules
Used vehicles in certain transactions
Residential property transactions meeting specific conditions
Financial leasing transactions involving listed machinery
Other goods expressly included in the relevant VAT list
Basic food products were moved to the 1% rate under earlier legislation. Investment Office – VAT Reduction for Basic Food
However, the 1% rate should not be assumed merely because a product is described as “food” or “essential.”
For example:
A packaged basic food product may be subject to 1%.
The same food supplied as part of a restaurant service may be subject to a different rate.
Alcoholic beverages may be treated differently.
Additional charges and services may require separate consideration.
How is VAT calculated in Turkey?
VAT is normally calculated by applying the relevant rate to the taxable sales price.
The basic formula is:
Net sales price × VAT rate = Output VAT
Example at the 20% rate
A Turkish company provides consultancy services for TRY 100,000.
Net service fee: TRY 100,000
VAT rate: 20%
VAT: TRY 20,000
Total invoice: TRY 120,000
The company collects TRY 20,000 VAT from the customer.
The TRY 20,000 is not normally treated as the company’s revenue. It is VAT collected on behalf of the tax authority, against which eligible input VAT may be deducted.
How is VAT included in a gross price calculated?
If the total price already includes 20% VAT, VAT is not calculated by simply multiplying the total by 20%.
For a VAT-inclusive price, the formula is:
VAT-inclusive price × 20 / 120 = VAT
Example
Total price including VAT: TRY 120,000
Net amount: TRY 100,000
VAT: TRY 20,000
For a 10% VAT-inclusive price:
Total price × 10 / 110 = VAT
For a 1% VAT-inclusive price:
Total price × 1 / 101 = VAT
What is output VAT?
Output VAT is the VAT that a business calculates and collects on its taxable sales.
For example:
Net invoice: TRY 100,000
VAT at 20%: TRY 20,000
Output VAT: TRY 20,000
The company reports this amount in its VAT return.
What is input VAT?
Input VAT is the VAT charged to a business on its purchases and expenses.
Examples include VAT paid on:
Office rent
Professional services
Software subscriptions
Equipment
Raw materials
Advertising
Telephone and internet expenses
Logistics
Business-related supplies
Eligible input VAT can generally be deducted from output VAT if:
The expense relates to the taxable business activity.
A legally valid invoice or document exists.
The invoice is issued to the company.
The transaction is properly recorded.
The deduction is not prohibited by law.
The deduction is claimed within the statutory period.
How much VAT does a company actually pay?
A company generally pays the difference between output VAT and deductible input VAT.
Example
During one month, a company has:
Output VAT collected from customers: TRY 200,000
Deductible input VAT paid to suppliers: TRY 130,000
The payable VAT would generally be:
TRY 200,000 – TRY 130,000 = TRY 70,000
If input VAT exceeds output VAT, the difference is generally carried forward.
A cash refund is not automatically available in every situation.
Is VAT calculated on profit?
No. VAT is generally calculated on the sale of goods and services, not on business profit.
This is different from corporate income tax.
| Tax | Main tax base |
|---|---|
| VAT | Taxable supply of goods or services |
| Corporate income tax | Taxable company profit |
| Dividend withholding tax | Distributed after-tax profit |
| Payroll taxes | Employee remuneration |
| Stamp tax | Specified documents and transactions |
A loss-making company may still have VAT payable because VAT does not depend on whether the company made an overall profit.
Does every company in Turkey charge 20% VAT?
No.
The applicable VAT treatment depends on the transaction, not simply on the company’s legal form.
A Turkish limited company may have:
Sales subject to 20% VAT
Sales subject to 10% VAT
Sales subject to 1% VAT
Export transactions exempt from VAT
Transactions outside the scope of VAT
Partially exempt transactions
Transactions subject to VAT withholding
A single company may use several VAT treatments during the same month.
Is there a VAT registration threshold in Turkey?
Turkey generally does not operate a broad small-business VAT registration threshold similar to those found in some European countries.
A business beginning a taxable commercial or professional activity in Turkey will generally need to register with the tax authority and comply with VAT obligations from the commencement of the activity, unless a specific exemption applies.
The requirements depend on:
Type of activity
Legal form
Customer profile
Place of supply
Applicable exemption
Simplified or special tax regime
Whether the supplier is established in Turkey
Foreign businesses supplying digital services to Turkish consumers may also face special VAT registration rules even without an ordinary Turkish company.
Who is required to register for VAT in Turkey?
VAT obligations may arise for:
Turkish limited liability companies
Turkish joint-stock companies
Sole proprietorships
Self-employed professionals
Turkish branches of foreign companies
Permanent establishments of foreign companies
Importers
E-commerce sellers
Digital service providers
Foreign digital platforms supplying Turkish consumers
Joint ventures and other taxable entities
The fact that a business is foreign-owned does not remove its Turkish VAT obligations.
How frequently are VAT returns filed in Turkey?
VAT returns are generally filed monthly in Turkey.
The company normally reports:
Taxable sales
Output VAT
Purchases and input VAT
Exempt transactions
VAT withholding
Carried-forward VAT
Payable or refundable VAT
Exact filing and payment deadlines should be checked in the official 2027 tax calendar.
A company may still be required to submit a VAT return even when:
It has made no sales.
It has no VAT payable.
All its sales are VAT-exempt.
It has only carried-forward input VAT.
Are exports of goods subject to Turkish VAT?
Exports of goods are generally exempt from Turkish VAT if the statutory export and customs conditions are satisfied.
This is normally a full exemption, meaning that input VAT attributable to the export may be:
Deducted from other output VAT
Carried forward
Refunded, subject to the applicable procedures
The exporter should retain documents such as:
Export invoice
Customs declaration
Transportation documents
Bank receipts
Sales agreement
Delivery documents
Proof that the goods left Turkey
A sale to a foreign customer is not automatically an export if the goods remain in Turkey.
Are services provided to foreign customers exempt from VAT?
Qualifying services supplied to foreign customers may be exempt from Turkish VAT as an export of services.
Under the Turkish VAT rules, two fundamental conditions are:
The service must be supplied to a customer outside Turkey.
The service must be used or enjoyed outside Turkey.
The foreign customer should also be identified through an invoice or similar document issued in the customer’s name.
The Turkish Revenue Administration explains that a service qualifies where it is provided for a foreign customer and relates to the customer’s activities outside Turkey rather than its activities in Turkey. Turkish Revenue Administration – Service Export Conditions
What are the VAT conditions for an export of services?
The main conditions generally include:
The customer is established outside Turkey.
The invoice is issued to the foreign customer.
The service is provided for the foreign customer.
The service is used or benefited from outside Turkey.
The transaction is supported by a contract and other records.
The payment and foreign exchange documentation requirements are satisfied where applicable.
The service is not connected with a Turkish activity or beneficiary.
The customer’s foreign address alone is not sufficient.
Is every invoice issued abroad VAT-exempt?
No.
The following statement is incorrect:
“The invoice is issued to a foreign company, so no Turkish VAT applies.”
The actual use and benefit of the service must be examined.
Example: service benefiting a foreign business
A Turkish software company develops an application exclusively for the foreign operations of a German company.
If all conditions are met and the software is used outside Turkey, the service may qualify as a VAT-exempt export of services.
Example: service used in Turkey
A German company hires a Turkish consultant to supervise the construction of a hotel in Antalya.
Although the invoice is issued to a German company, the service relates to a project and activity in Turkey. The service will not normally qualify as an export of services merely because the customer is foreign.
Example: Turkish holiday service
A foreign travel company purchases services relating to holidays used by tourists in Turkey.
Because the service is used in Turkey, Turkish VAT may apply. The Revenue Administration has specifically distinguished services used abroad from tourism services used in Turkey. Turkish Revenue Administration – Foreign Customer and Use in Turkey
Is software sold abroad exempt from Turkish VAT?
Software supplied to a foreign customer may qualify as an export of services if:
The customer is outside Turkey.
The invoice is issued to the foreign customer.
The software or development service is used outside Turkey.
The transaction satisfies the applicable documentation requirements.
The Turkish Revenue Administration has recognised that software supplied online to foreign customers may qualify for the service-export exemption where the statutory conditions are met. Turkish Revenue Administration – Software Export VAT
However, classification can become more complicated where the payment relates to:
A software licence
A royalty
A digital subscription
Access to a platform
A copyright transfer
Custom software development
Software maintenance
Cloud or hosting services
A mixed licence and support agreement
The contract should clearly separate the services where different VAT treatments may apply.
Are consultancy services supplied abroad VAT-exempt?
Consultancy services may qualify if the service:
Is supplied to a foreign customer
Relates to the customer’s business outside Turkey
Is used outside Turkey
Is properly documented
For example, a Turkish consultant advising a UK company on the UK market may qualify.
A Turkish consultant advising the same UK company about opening and operating a Turkish subsidiary will generally provide a service connected with Turkey. The foreign address of the customer does not automatically make the service VAT-exempt.
Are accounting services provided to foreign customers VAT-exempt?
It depends on what the accounting service concerns.
Potentially VAT-exempt
Accounting analysis concerning the foreign customer’s operations outside Turkey may qualify if all export-of-service conditions are met.
Generally subject to Turkish VAT
Accounting, bookkeeping, payroll or tax compliance services relating to:
A Turkish company
A Turkish branch
Employees in Turkey
Turkish tax returns
Turkish statutory books
are generally used in Turkey, even when the invoice is paid by a foreign parent company.
Are services performed abroad subject to Turkish VAT?
A service physically performed and used outside Turkey may be outside the scope of Turkish VAT, depending on the circumstances.
This is technically different from a service that is:
Performed in Turkey
Supplied to a foreign customer
Used outside Turkey
Treated as an exempt export of services
The distinction can affect:
VAT return reporting
Input VAT deduction
Refund rights
Invoice wording
Supporting documents
What is reverse-charge VAT in Turkey?
Reverse-charge VAT generally requires the Turkish customer to declare VAT on certain services purchased from a foreign supplier.
It commonly arises where:
The supplier is not established in Turkey.
The service is used or benefited from in Turkey.
The foreign supplier does not charge Turkish VAT.
The Turkish customer is responsible for reporting the tax.
The Turkish customer may declare the VAT through the relevant reverse-charge VAT return.
If the legal conditions are satisfied, the same VAT may later be deducted as input VAT. Timing and payment conditions must be observed.
Which foreign services may create reverse-charge VAT?
Examples may include:
Foreign consultancy services
Software subscriptions
Cloud services
Advertising services
Management services
Royalties and licences
Technical support
Online database access
Legal services
Group company service charges
Digital platform fees
Foreign commission expenses
The correct treatment depends on where the service is used and whether a specific exemption applies.
Reverse-charge VAT example
A Turkish company purchases consultancy services from a UK company for TRY 100,000.
The service is used by the Turkish company in Turkey.
Assuming the standard 20% rate applies:
Foreign service fee: TRY 100,000
Reverse-charge VAT: TRY 20,000
VAT declared by Turkish customer: TRY 20,000
Subject to the deduction rules, the company may also deduct the TRY 20,000 as input VAT.
Even where the net cash cost is neutral, the declaration must still be completed correctly.
What is VAT withholding in Turkey?
Under the VAT withholding mechanism, the buyer pays only part of the VAT to the supplier and declares the remaining part directly to the tax authority.
VAT withholding can apply to specified goods, services and customers.
Potentially covered transactions include certain:
Construction services
Engineering and architectural services
Cleaning services
Labour supply services
Security services
Maintenance and repair services
Transportation services
Consultancy services
Advertising services
Metal, paper or recycling supplies
Public-sector purchases
The applicable withholding ratio varies by transaction.
VAT withholding is different from:
Income tax withholding
Corporate tax withholding
Reverse-charge VAT on foreign services
Dividend withholding tax
Does VAT apply to imports?
Yes. Goods imported into Turkey are generally subject to import VAT.
Import VAT is normally calculated on a customs base that may include:
Customs value
Customs duty
Special Consumption Tax
Other import taxes and charges
Certain costs incurred up to the place of importation
Eligible import VAT may generally be deducted by a VAT-registered business if the necessary customs documents exist.
Is import VAT a permanent cost?
Not always.
For a VAT-registered business making taxable sales, import VAT may generally be deductible.
However, import VAT may become a cost where:
The company conducts exempt activities without deduction rights.
The goods are used for non-business purposes.
The customs document is incorrect.
The importer of record is not the company claiming the VAT.
The deduction is prohibited.
The company cannot use or recover accumulated input VAT.
The transaction is not properly recorded.
Can a company obtain a VAT refund?
VAT refunds may be available for specified transactions, including certain:
Exports of goods
Exports of services
International transportation services
Investment incentive transactions
Supplies subject to a reduced VAT rate
Diplomatic exemptions
Other full exemptions
A refund is not automatic.
The tax authority may require:
VAT refund application
Certified public accountant report
Sworn-in CPA report
Tax inspection report
Lists of invoices
Customs documents
Bank receipts
Contracts
Input VAT allocation
Supplier checks
Guarantees
The procedure depends on the amount and type of refund.
What is the difference between a full and partial VAT exemption?
Full VAT exemption
Under a full exemption:
No VAT is charged on the exempt sale.
Input VAT related to that sale may generally be deducted.
Unused input VAT may potentially be refunded.
Exports are the main example.
Partial VAT exemption
Under a partial exemption:
No VAT may be charged on the sale.
Related input VAT may not be deductible.
Non-deductible VAT may become an expense or cost.
The distinction is important because two VAT-exempt transactions can have very different financial consequences.
Is “0% VAT” the same as a VAT exemption?
Not exactly.
People often describe exports as “0% VAT,” but Turkish legislation generally treats them as VAT-exempt transactions rather than ordinary transactions taxed at a 0% rate.
For practical communication, “0% VAT” may be understandable. For invoices, returns and legal analysis, the correct exemption code and legal basis should be used.
Does VAT apply to company formation costs?
Most professional services connected with establishing a company are generally subject to VAT.
Examples may include:
Accounting services
Legal services
Consultancy
Translation
Virtual office services
Corporate service provider fees
Notary-related service components
Registered office services
Official taxes, duties and certain charges should be distinguished from professional service fees.
A foreign investor should therefore confirm whether a quoted company-formation price is:
VAT-inclusive
VAT-exclusive
Inclusive of official costs
Exclusive of official costs
Inclusive of translation and notary expenses
Does VAT apply to commercial rent?
Commercial property rent may be subject to VAT where the landlord carries out the rental within a business or corporate activity.
Additional withholding obligations may also arise depending on:
Identity of the landlord
Whether the landlord is an individual or company
Property classification
Tenant’s tax status
Nature of the rental
VAT and income or corporate withholding tax are separate issues.
What is the VAT rate on residential property in Turkey?
The VAT rate on residential property may vary.
Depending on the transaction and the legal conditions, residential property can be subject to:
1% VAT
10% VAT
20% VAT
A specific exemption
The applicable rate may depend on:
Net floor area
Building permit date
Property value
Land tax value
Location
Urban transformation status
Seller’s tax status
Whether the property is new or used
Whether the buyer is a qualifying foreigner or non-resident
Whether the property is sold as part of a commercial activity
A property’s advertised description is not sufficient to determine the VAT rate.
Can foreigners buy property without VAT?
A qualifying first sale of residential or commercial property to certain foreign individuals or non-resident entities may benefit from a VAT exemption if all statutory requirements are met.
Conditions may concern:
Buyer’s residence status
Turkish citizenship history
Bringing foreign currency into Turkey
Payment documentation
First-sale requirement
Minimum holding period
Prohibition on early disposal
Seller’s status
Registration and reporting
The exemption is not available to every foreign buyer or every property.
Are bank and insurance transactions subject to VAT?
Banking and insurance transactions are generally outside the ordinary VAT system and may instead be subject to Banking and Insurance Transactions Tax.
The official investment guide notes that banking and insurance transactions remain exempt from VAT but are subject to a separate transaction tax. Investment Office – Turkey Tax Guide
This treatment should not be extended automatically to ordinary consultancy or financial advisory companies.
Are salaries subject to VAT?
No. Salary paid under an employer-employee relationship is not normally subject to VAT.
However, an independent contractor providing services through a sole proprietorship or company may need to charge VAT.
The distinction depends on the actual relationship:
Independence
Control over working hours
Use of equipment
Commercial risk
Ability to work for multiple customers
Contractual structure
Payment method
Integration into the customer’s organisation
Describing an employee as a “consultant” does not automatically convert salary into a VATable independent service.
Do freelancers charge VAT in Turkey?
A freelancer operating as a taxable sole proprietor or self-employed professional will generally charge VAT on domestic taxable services unless:
A specific exemption applies.
The transaction is outside the scope of VAT.
The service qualifies as an export of services.
The person falls within a special exemption regime.
A freelancer’s VAT obligations are separate from income tax and social security obligations.
Is VAT charged on invoices issued in foreign currency?
Yes, where the transaction is subject to Turkish VAT.
VAT may be calculated on a foreign currency invoice, but the amounts must generally be converted into Turkish lira for Turkish tax records and returns using the applicable exchange-rate rules.
Foreign exchange differences arising after the invoice may also require VAT analysis.
Does receiving payment into a foreign bank account remove VAT?
No.
VAT treatment is determined by the underlying supply, not only by:
Currency of payment
Country of the bank account
Payment platform
Customer’s payment method
Location of the money
A Turkish business may still have VAT obligations even if the customer pays into a foreign bank account.
Can input VAT be deducted on passenger cars?
VAT on passenger cars may be restricted depending on the company’s activity.
Companies whose principal business involves:
Vehicle rental
Car trading
Passenger transport
Operating vehicles commercially
may be treated differently from an ordinary consultancy or trading company purchasing a passenger car.
The same restrictions do not necessarily apply to commercial vehicles.
Are food, restaurant and hotel VAT rates the same?
No.
Different treatments may apply to:
Packaged food
Restaurant meals
Catering
Alcoholic beverages
Hotel accommodation
Additional hotel services
Mini-bar sales
Event organisation
Conference packages
Tourism services
The VAT rate must be determined by separating the goods and services included in the package where required.
VAT should also not be confused with Turkey’s separate accommodation tax.
Is accommodation tax the same as VAT?
No.
Accommodation tax and VAT are different taxes.
A hotel transaction may potentially involve:
VAT
Accommodation tax
Tourism-related contributions
Withholding obligations
Corporate tax
A temporary accommodation tax rate applicable during 2026 does not automatically determine the rate for 2027. The 2027 accommodation tax position should be checked separately.
What happens if the wrong VAT rate is used?
Using an incorrect VAT rate may result in:
Additional tax assessment
Tax loss penalty
Late-payment interest
Rejected input VAT deduction
Corrective invoices
Amended VAT returns
Customer disputes
Customs differences
VAT refund delays
Special irregularity penalties
Charging too much VAT can also create problems. The excess amount cannot necessarily be retained as ordinary revenue.
How can a company determine the correct VAT rate?
The company should review:
Exact commercial description
Customs tariff code, if relevant
VAT rate lists
Relevant Presidential Decisions
Turkish VAT General Application Communiqué
Place of supply
Customer’s location
Place where the service is used
Available exemption
VAT withholding requirements
Existing Revenue Administration rulings
Need for a private tax ruling
For unusual or high-value transactions, obtaining a written private ruling may be safer than relying on a general online list.
Frequently Asked Questions
What is Turkey’s standard VAT rate in 2027?
The standard rate is expected to remain 20% unless new legislation changes it.
What are Turkey’s reduced VAT rates?
Turkey currently applies reduced rates of 10% and 1% to specifically listed goods and services.
Are the 2027 VAT rates final?
No separate 2027 rate decision has yet been published as of August 2026.
Is VAT charged on revenue or profit?
VAT is generally charged on taxable supplies, not on profit.
Is VAT included in corporate tax?
No. VAT and corporate income tax are separate.
Do foreign-owned Turkish companies pay VAT?
Yes. Foreign ownership does not remove the VAT obligations of a Turkish company.
Are exports subject to VAT?
Exports of goods are generally VAT-exempt if the legal and customs conditions are met.
Are services to foreign customers VAT-exempt?
They may be exempt if the customer is abroad and the service is used outside Turkey.
Is a foreign invoice automatically VAT-exempt?
No. The location where the service is used must also be reviewed.
Is software exported from Turkey VAT-exempt?
It may qualify if the customer and use of the software are outside Turkey and the other conditions are met.
Is foreign consultancy purchased by a Turkish company subject to VAT?
Reverse-charge VAT may apply if the service is used in Turkey.
Can export-related input VAT be refunded?
Potentially yes, because exports are generally covered by a full VAT exemption.
Is there a VAT threshold for small Turkish companies?
Turkey generally does not provide a broad registration threshold for ordinary taxable businesses.
Are VAT returns filed monthly?
Generally yes.
Must a company file a VAT return if it has no sales?
Usually yes, while its VAT registration remains active.
Is VAT charged on dividends?
No. Dividends are not consideration for a supply of goods or services. Dividend withholding tax may apply instead.
Is VAT charged on share capital?
No. A normal capital contribution is not a sale of goods or services.
Can a company recover all input VAT?
No. Input VAT may be restricted where it relates to non-business use, partial exemptions, passenger cars or other legally restricted expenses.
Turkey VAT Checklist for 2027
Before issuing an invoice, a Turkish business should answer:
What exactly is being sold?
Is it a good, service, licence or royalty?
Where is the supplier established?
Where is the customer established?
Where is the service used?
What is the applicable VAT rate?
Is the transaction in a reduced-rate list?
Does a full or partial exemption apply?
Is an exemption code required?
Is VAT withholding applicable?
Is reverse-charge VAT applicable?
Is the invoice in Turkish lira or foreign currency?
Can related input VAT be deducted?
Is a VAT refund available?
Are customs or export documents required?
Is a separate contract needed?
Is the foreign customer the real beneficiary?
Does the service relate to an activity in Turkey?
Has the transaction been recorded in the correct VAT period?
Should a private tax ruling be requested?
Conclusion
Turkey’s standard VAT rate is expected to remain 20% in 2027, with reduced rates of 10% and 1% applying to specifically listed goods and services.
Exports of goods and qualifying exports of services may benefit from a VAT exemption. However, a foreign customer or foreign-currency payment does not automatically make a transaction VAT-free.
The correct treatment depends on:
Nature of the product or service
Customer’s location
Place where the service is used
Applicable reduced-rate list
Export documentation
VAT withholding
Reverse-charge VAT
Input VAT recovery
Full or partial exemption status
Incorrect VAT treatment can produce tax assessments even where the company made no profit. VAT analysis should therefore be completed before the contract and invoice are finalised.
Turkey VAT and Tax Compliance Services
OZM Consultancy assists foreign investors and internationally active companies with:
Turkish VAT registration
Monthly VAT returns
VAT rate analysis
Export of goods
Export of services
Software and digital-service VAT
Reverse-charge VAT
VAT withholding
Import VAT
VAT refund applications
E-invoice and e-archive setup
Corporate tax compliance
Company formation in Turkey
Tax structuring for foreign-owned companies
If you plan to establish a company, sell goods or provide services in Turkey in 2027, we can determine the correct VAT treatment before the first contract or invoice is issued. Contact OZM Consultancy for a transaction-specific VAT assessment.
